INTERSHOP Communications (ISHA) Trading Update summary

Financial performance highlights

• Cloud revenues rose 27% to EUR 20.5 million, now representing 53% of total revenues.

• Total revenues increased 2% to EUR 38.8 million, with EBIT turning positive at EUR 0.1 million from EUR -2.5 million.

• Cloud ARR grew 16% to EUR 20.1 million; net new ARR surged 40% to EUR 2.7 million.

• License and maintenance revenues climbed 14%, while service revenues dropped 35% due to a partner-first strategy.

• Gross margin improved to 46%, and EBITDA margin rose to 8%; earnings after taxes were EUR -0.4 million.

Strategic and operational developments

• Shift to a partner-first strategy led to reduced service revenues but improved profitability.

• Operating expenses and income decreased by 4%, with notable reductions in marketing and R&D costs.

• Workforce reduced to 261 employees from 299, partly due to personnel reduction measures.

• Focus for 2025 includes launching Intershop agents with AI extensions and partner-based AI solutions.

• Emphasis on product revenues and autonomous commerce vision to drive future growth.

Outlook and guidance

• Slight increases expected in incoming cloud orders and net new ARR for 2025.

• Forecasts a 5–10% revenue decline in 2025 due to the partner-first strategy and lower service revenues.

• Expects a slightly positive EBIT for 2025, maintaining focus on profitability.

• Equity ratio remains solid at 29%, with cash and cash equivalents at EUR 8.7 million.

• Full audited financials to be published in mid-March 2025.